By NUPIAO News Desk
On July 30 local time, Apple released its fiscal 2026 third-quarter earnings (covering the period through June 27), with total revenue, net profit, and earnings per share all hitting all-time highs for the period, while multiple hardware segments also set new June-quarter records.
But in after-hours trading, the stock took a nosedive, plunging as much as 8.37% before settling at a 6.33% drop at the time of writing. That wiped out over $300 billion in market value in a single night, completely overshadowing the positive momentum from the quarter’s results.
According to the report, Apple’s total revenue for the third fiscal quarter came in at $109.42 billion, up 16% year-over-year and beating the analyst consensus of $108.65 billion compiled by LSEG. Diluted earnings per share hit $2.02, a 29% jump year-over-year, with $0.11 of that coming from a one-time U.S. tariff rebate. Even stripping that out, earnings still edged past market estimates.
Net profit for the quarter reached $29.789 billion, up 27% year-over-year, while operating cash flow hit a historic peak for any June quarter. Gross margin held strong at 50.1%, with the tariff rebate adding roughly 2 percentage points to that figure.
Apple CEO Tim Cook said in the earnings release, “Today we’re reporting our best June quarter ever, with double-digit revenue growth across iPhone, Mac, Services, and every geographic segment. At WWDC 2026, we unveiled the new Siri AI, along with our latest software innovations across the board and important new child safety features.”
Hardware remains the core engine driving Apple’s overall revenue, with iPhone alone contributing nearly half of total sales. The segment brought in $54.25 billion for the quarter, up 21.7% year-over-year and marking the highest June-quarter sales volume ever. Premium Pro models continued to push up the average selling price. Even as the global smartphone market keeps shrinking, Apple managed to grow its market share to 20%, widening the gap with Android rivals.
Mac revenue hit $10.35 billion, a hefty 28.7% jump year-over-year. The MacBook Air and MacBook Pro powered by the M5 chip family, launched earlier this year, continue to see demand outstrip supply. Cook added during the earnings call that Mac sales in Greater China, Southeast Asia, and other emerging markets set new records for the period, fueled by sustained demand in the premium productivity segment. This also marked Cook’s final earnings call as Apple’s CEO.
Elsewhere, wearables, home, and accessories pulled in $7.88 billion, up 6.5% year-over-year. iPad revenue came in at $6.19 billion, slipping about 5.9% year-over-year, as longer replacement cycles across the tablet market weighed on growth — making it the only hardware category to post a year-over-year decline.
But the real sore spot this quarter was the services business, which has long been the backbone of Apple’s long-term profitability. Services revenue totaled $30.74 billion, up just 12% year-over-year and missing the $31.36 billion analysts had expected. As a core cash cow with gross margins near 75%, the slowdown in growth directly undercuts confidence in Apple’s long-term earnings trajectory. While paid subscriptions across all platforms have surpassed 1.5 billion and the public beta of the new Siri AI has drawn positive feedback, AI-related paid value-added services haven’t yet scaled into meaningful revenue — and they’re nowhere near enough to offset the deceleration in App Store and streaming growth.
Geographically, Europe and Greater China tied for the fastest growth at 22% year-over-year, while the Americas region generated $45.78 billion in revenue, up 11%. Japan and the rest of Asia-Pacific maintained solid double-digit growth.
Even though Greater China’s 22% growth looks impressive on a global scale, analysts had widely expected the region to exceed 25%. Domestic Android flagships and foldable devices are siphoning off premium users, and intensifying competition in the local internet services ecosystem is dragging on monetization — making the region a key risk factor that investors are watching closely.
The real trigger for the stock plunge, though, was Apple CFO Kevin Parekh’s fourth-quarter revenue guidance. He projected revenue growth of 9% to 11% for the September quarter, with the top end of that range coming in below the Wall Street consensus of 12.1%. Parekh flagged two major headwinds: foreign exchange fluctuations would shave about 2.5 percentage points off overall growth, and chip and memory supply shortages would have a significantly larger negative impact quarter-over-quarter, constraining production capacity across all three core product lines — iPhone, Mac, and iPad.
Cook elaborated that demand isn’t weakening at all — in fact, orders are far exceeding what the supply chain can handle. With advanced-node self-developed chip capacity and DRAM memory supply both constrained, he admitted, “We’re struggling with the supply chain. Its flexibility is far below normal. Even with early stocking to boost shipments, the capacity ceiling is hard to break through.” Cook noted there are only three major memory suppliers in the market right now, and Apple is evaluating every possible avenue to diversify supply channels and ease the dual pressure of cost and availability.
On the day of the earnings release, Apple’s board also announced a cash dividend of $0.27 per share, to be paid out on August 13, aiming to steady shareholder returns. But the dividend boost was nowhere near enough to offset the selling pressure from the weaker-than-expected guidance.
All things considered, Apple finds itself at a critical inflection point between old and new growth engines. Hardware demand remains robust, and the long-term AI ecosystem is starting to take shape. But the trifecta of short-term supply chain bottlenecks, slowing services growth, and unfavorable currency movements has erased the valuation tailwind that the strong quarter should have provided.
This also signals that the capital markets are no longer satisfied with record-breaking quarters — they’re laser-focused on whether Apple can break through the triple ceiling of production capacity, cost pressure, and business growth over the next 12 months. This counterintuitive “earnings up, stock down” drama sets the stage for intense market jockeying as the upcoming product cycle and AI commercialization unfold.
